Who Sets Up SPVs, Syndicates, and Funds

If you’re new to angel investing, or even a few deals in, you’ve probably heard terms like SPV, syndicate and fund thrown around. They sound like finance jargons, but are pretty simple once you break them down. These are just different ways investors pool money and back startups. The real question is: Who sets these up and why?

As an investor, knowing who’s behind the wheel of these investment vehicles can help you decide whether to get in, observe, or maybe even set one up yourself someday. Let’s dive into what these models are, who creates them, and how they fit into the broader world of angel investing.

What’s an SPV and Who Sets It Up?

‍A Special Purpose Vehicle, or SPV, is a simple legal entity created to invest in a single startup. Imagine a container for one deal. Investors put their money into the SPV and the SPV invests in the startup. This way investors can avoid being listed on the startup’s cap table while still holding equity.

So who sets up an SPV? Typically an experienced angel investor, a founder turned investor, or a syndicate lead who’s already found a great deal. They want to share that deal with others, but maintain control over the investment. This lead investor negotiates with the startup, sets up the legal SPV, and manages the ongoing admin.

Platforms like AngelList, Flow, Vauban (now part of Carta), and Assure have made it easier than ever to create and manage SPVs without getting lost in paperwork. The SPV structure keeps investments organized, makes it easy to onboard multiple backers, and helps founders avoid cluttered cap tables.

Leads who set up SPVs get “carry”—a percentage of the profit when the investment exits. This is their incentive for doing the heavy lifting. For backers, it’s a way to get into deals they wouldn’t otherwise have access to. For leads, it’s a smart way to amplify impact without launching a full blown fund.

What’s a Syndicate and Who Runs It?

‍A syndicate is a group of investors, led by someone who sources and curates startup deals. The lead investor acts like a scout. They find startups, negotiate terms, do basic due diligence, and offer these deals to their network of backers. Backers review the opportunity and decide whether or not to invest on a deal by deal basis.

So who sets up a syndicate? Usually someone with a good track record or deep connections in the startup world—often a founder, operator, or angel who has built credibility in a specific space. They’re not full time fund managers (yet), but are trusted enough that others want to follow their lead.

Running a syndicate comes with responsibility. The lead doesn’t just source the deal—they manage investor communications, send updates, help resolve questions, and occasionally support the startup post investment. Platforms like AngelList and Flow Club make this easier by handling compliance, wire transfers, cap table management, and tax docs. This lets leads focus on building their network and sourcing great companies.

Syndicates are a great tool for new angels. They let you learn from someone more experienced while getting access to vetted deals. Leads often take 10-20% carry and may also build a following that could evolve into a fund one day.

What’s a Fund and Who Launches One?

‍A fund is a larger, more formal structure. Unlike SPVs or syndicates, a fund raises capital upfront from investors—called Limited Partners (LPs)—and invests that money over time in multiple startups. Funds invest in 10 to 30 companies over several years.

Who sets up a fund? This is where things get a little more serious. Funds are typically launched by experienced investors, operators, or firm founders. These General Partners (GPs) are expected to have a thesis, a pipeline of deals, and the operational chops to manage millions in capital. Some start as angel investors or syndicate leads before graduating to fund managers.

Running a fund means taking on full responsibility for capital allocation, portfolio strategy, and investor reporting. GPs need to send quarterly reports, handle annual audits, and manage ongoing relationships with LPs. Setting up a fund is not cheap. It requires legal documents like a Limited Partnership Agreement (LPA), Private Placement Memorandum (PPM), and subscription docs. The fund itself is typically structured as a Delaware LP with the GP entity managing it. 

Tools like AngelList Stack, Carta, and dedicated fund administrators make fund creation easier. But even with these tools expect initial costs of $50K or more plus ongoing expenses for tax filings, audits, and compliance. In exchange, fund managers get a management fee (usually 2% annually) and carry (often 20% of profits).

How Do You Decide Which Structure to Use?

‍Choosing between an SPV, syndicate, or fund depends on your goals, experience, and the size of your investor network. SPVs are great if you have a single deal you’re excited about and want to share with others. Syndicates make sense if you have a steady stream of deals and want to build a following without the complexity of a fund. Funds are for those looking to invest at scale with long term commitments from LPs.

Each structure has trade-offs. SPVs are flexible but deal specific. Syndicates are lightweight and scalable, but require ongoing hustle. Funds offer stability, but come with high expectations and regulatory overhead.

If you’re just getting started, the SPV or syndicate route is often best. You can gain experience, build trust, and see if you enjoy the responsibility of leading deals. Over time, if you consistently deliver returns and build a strong LP base, moving to a fund might be the natural next step.

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Who Supports the Setup Process?

‍Setting up any of these structures requires support. Nobody does it solo. Even seasoned investors lean on platforms, legal counsel, and fund administrators to get everything off the ground. AngelList is one of the most popular tools for setting up SPVs, syndicates, and even small funds. They offer an all in one solution that handles banking, tax forms, cap table management, and LP onboarding.

Other options like Assure, Flow Club, Vauban, and Carta provide specialized tools depending on your geography and investing needs. Carta is great for equity management and fund operations. Vauban offers EU friendly options. Assure focuses on fast SPV formation and ongoing admin support.

Beyond platforms, you’ll also want a startup savvy lawyer, a compliance advisor, and a tax consultant on your side. These professionals help ensure you’re operating legally and transparently, which is especially important when managing other people’s money.

‍How Much Does It Cost?

‍Each structure has a different price tag. SPVs are the cheapest way to get started especially if the platform lets you roll the setup fee into carry. Here’s a rough breakdown:

• SPV: $8K to $15K to set up, minimal ongoing costs.
• Syndicate: $5K to $10K, mostly platform fees.
• Fund: $50K+ in legal and admin costs upfront, plus annual audit and tax fees.

Ongoing costs vary. Syndicates and SPVs don’t need annual audits but funds do. Most platforms help with tax reporting and some offer a “no upfront fee” model, where setup costs are only recovered if the investment returns capital. Many lead investors are happy to cover these costs in exchange for potential upside through carry.

Can Anyone Do It?

‍In theory, yes. Anyone can set up an SPV, syndicate, or even a fund. But in practice, investors will just follow your lead, if you bring value to the table. That value can be access to great deals, sector knowledge, founder trust or a history of returns.

Many investors build their reputation slowly. They start by investing solo, then co-invest with friends, or join syndicates. Over time, they test leading a deal via an SPV. Once they’re confident and credible, they launch a syndicate. A few years later, if they’ve built strong relationships and a track record, they might raise a fund.

You don’t need to be an MBA, former VC, or financial whiz. But you do need trust, transparency, and a willingness to learn. At Angel School, we’ve seen engineers, product managers, marketers, and operators all grow into confident investor leads. If you’re willing to do the work, there’s space for you here too.

What Are the Risks?

‍When you lead an SPV, syndicate, or fund you’re not just investing your money—you’re managing someone else’s. That comes with expectations around diligence, communication, legal compliance, and ethics. Mistakes can hurt your reputation or in the worst cases result in legal or financial consequences. That’s why transparency is key. Lead investors must communicate clearly about fees, risk, timelines, and outcomes. They must also avoid conflicts of interest and prioritize what’s best for the LPs and founders.

Still the risks can be managed, and the rewards are significant. Leading deals gives you influence, access, and potential upside far beyond what you’d get as a passive check-writer.

Real-World Example: Maya’s First SPV

‍Let’s say Maya is a former operator who just found a promising AI startup building tools for small law firms. She’s confident in the founder, has done her due diligence, and wants to invest $25K. She knows other angels in her network would also be interested, so she decides to set up an SPV.

She uses AngelList, sets a target of $250K, and reaches out to 10 trusted investors. Within a week, the SPV is fully subscribed. Maya takes 15% carry, manages communications, and updates everyone post-investment. A year later, the startup raised a Series A at a 5x markup. Everyone’s thrilled and Maya earns a reputation as a sharp reliable lead. That’s how it starts.

Conclusion: Learn How to Lead with Angel School

‍SPVs, syndicates and funds may seem complex from the outside, but once you understand who sets them up and why, they become powerful tools in your investing journey. These structures allow investors to scale impact, build communities, and access better deals together.

But leading deals isn’t just about spreadsheets and structure. It’s about trust, vision, and execution.

At Angel School, we help you master those skills through our Venture Fundamentals course. You’ll learn how SPVs and syndicates work, how to structure your first deal, and how to communicate like a pro with backers and founders alike. Whether you’re just getting started or looking to level up, we’ll help you build the foundation to become a confident and capable lead investor.

Ready to lead the next great investment? Learn with Angel School’s Venture Fundamentals and make your mark in the startup world.